Low-achieving students in many school districts are retained in a grade in order to allow them to gain the academic or social skills that teachers believe are necessary to succeed academically. This practice is highly controversial, with many researchers claiming that it leads to higher dropout rates although selection issues have complicated previous analyses. In this paper, we use a regression discontinuity design to examine the impact of grade retention on high school completion. We find that grade retention leads to a modest increase in the probability of dropping out for older students, but has no significant effect on younger students.
We would like to thank the Chicago Public Schools for providing the data used in this study. We are particularly grateful to Dan Bugler, Amy Nowell and Andrea Ross for their help in securing the necessary data and to Wei Ha and JD LaRock for excellent research assistance. All remaining errors are our own. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.